Renzo Protocol's EZETH Experiences Brief Dip, Crypto Trader Profits Over $396,000
Summary:
On April 24, the restaked Ether token (EZETH) of Renzo Protocol briefly dipped to a low of $688 on the Uniswap decentralized exchange. The dip, or depeg, was likely due to a sell-off following the conclusion of the protocol's initial airdrop season, notably impacting leveraged protocols like Gearbox and Morpho Labs. After their token (REZ) was added to the Binance launch pool and an airdrop announcement, Renzo Protocol has been gaining increased attention. Following the depeg incident, crypto trader czsamsunsb.eth made a two-hour profit of 121.65 ETH, or over $396,000.
On April 24, the price of Renzo Protocol's re-staked Ether token (EZETH) briefly dipped, or "depegged", to a low of $688 on Uniswap decentralized exchange. Dexscreener data reveals the token swiftly rebounded to regain price parity with Ether (ETH). According to Tommy, a pseudonymous crypto analyst, the incident was probably the result of a sell-off after the end of Renzo Protocol’s initial airdrop season.
Tommy explained in an April 24 post that users likely wanted to regain their Ether to utilize other liquid restaking tokens (LRT) and protocols following the conclusion of the airdrop. Renzo is the second largest liquid restaking protocol, boasting over $3.3 billion total value locked (TVL), a figure that increased by 126% in the previous month, with Ether.fi claiming the top spot with a TVL of more than $3.9 billion, as per DefiLlama data.
Tommy also noted that depegging issues are an emerging problem for LRTs, highlighting temporary imbalances in the DEX pool as a potential risk. The depeg event triggered widespread liquidations on leverage-based protocols like Gearbox and Morpho Labs. Those using LRTs as collateral to borrow ETH for leverage, known as loopers, experienced the most significant losses.
Renzo Protocol has been gaining attention since their impending token (REZ) was added to the Binance launch pool on April 23, coinciding with the announcement of their airdrop. Renzo earmarked 10% of its token allocation for the first airdrop season.
Crypto trader czsamsunsb.eth profited a remarkable 121.65 ETH, equivalent to over $396,000, in just two hours following Renzo’s depegging incident, as noted by on-chain intelligence firm Lookonchain in an April 24 post. The trader invested 4,099 ETH to purchase 4,221 EZETH, netting a profit of 121.65 ETH in the process.
Published At
4/24/2024 4:44:49 PM
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